Davemac, it appears that at least the Federal student loans will be
cancelled upon notice of the borrower's death.
?Death of the Borrower. If a former student borrower dies, the
executor -- the person who collects and distributes the property left
at death -- can cancel any federal student loan.?
http://cobrands.public.findlaw.com/debtor_creditor/nolo/ency/63C80677-0D3E-4505-AC3B7782841603F6.html
These sites concur that a Stafford loan is cancelled upon the death of
the borrower:
http://www.ed.gov/prog_info/SFA/StudentGuide/2000-1/staffordcancel.html
http://www.gsfc.org/Main/publishing/pdf/2005/bulletin_78.pdf
And this is a pretty comprehensive discussion:
http://www.afsp.org/survivor/financial/pages/inventorye3.html
According to this discussion (dealing with suicide), even some
co-signed loans may be forgiven upon the borrower's death -- but
generally only federal loans, not private or university loans.
"Parent Loans for Undergraduate Students, better known as PLUS loans,
are another type of federal student loan. Payments can be cancelled on
these loans if the student/former student dies or if the parent who
takes out the loan dies. If both parents are listed on the PLUS loan,
however, the surviving spouse must continue to make payments. To have
a federal loan cancelled, contact the bank, credit union, or school
that sends the bill. They will probably request a copy of the death
certificate."
The site goes on to advise that non-Federal loans may not be
cancelled, but that they need only be paid from the former student's
estate (unless co-signed):
"Payments on student loans from the other three sources?state, college
or university, and private programs?will continue to be due in most
cases. (Some states and colleges will cancel loans of former students
who die.) Payments can be made from your loved one's estate. No one
else is responsible for payment unless he or she is a cosigner on the
student loan. Check with your state's department of higher education
or loan provider for specific policies."
You should provide the lenders with a formal request for cancellation,
along with a copy of the death certificate.
Since you specifically mentioned "student loans," I am assuming that
these are not secured debts. If they are secured debts, such as a
mortgage or home equity loan, that she was using to pay tuition, that
is a whole different animal.
In case it might be useful, this is a general checklist of what to do
when a family member dies:
http://www.unclefed.com/AuthorsRow/Newland/pass_on.html
And this is an overview of the probate process:
http://www.lucas-co-probate-ct.org/Administering%20an%20estate%20without%20a%20will.htm
Again, please accept my condolences for your loss; if there's anything
further I can help with, please don't hesitate to ask. |
